Lee Calls for Property Tax Reform Despite Political Risks
President Lee Jae-myung emphasized the need for reforming property taxes, stating that the current situation of rising real estate prices and low tax burdens is a "problem that will eventually explode." Speaking at a national forum on real estate policy in Yeouido, Seoul, on July 23, he noted that to normalize property taxes to levels typical of advanced countries, they would need to be increased at least threefold. However, he cautioned that such an increase could lead to significant public unrest.
"We must prepare for this, even if it incurs political costs," Lee said. "It will eventually happen, and while we don't know which generation will face it, it will have a tremendous impact on South Korea." He also clarified that any increase in property taxes should be designed gradually and differentially. Lee proposed setting appropriate tax burdens based on typical single-home ownership while suggesting lower tax burdens for primary residences and homes for low- and middle-income families, as well as regional properties. Conversely, he indicated that taxes could be increased for high-value homes, multiple properties, and those clearly intended for investment or speculation.
"We must prepare for this, even if it incurs political costs," Lee said. "It will eventually happen, and while we don't know which generation will face it, it will have a tremendous impact on South Korea." He also clarified that any increase in property taxes should be designed gradually and differentially. Lee proposed setting appropriate tax burdens based on typical single-home ownership while suggesting lower tax burdens for primary residences and homes for low- and middle-income families, as well as regional properties. Conversely, he indicated that taxes could be increased for high-value homes, multiple properties, and those clearly intended for investment or speculation.
Hyundai Reports Record Sales but Declining Operating Profit Amid U.S. Tariffs
Hyundai Motor Company reported record sales in the second quarter of this year, yet its operating profit plummeted by over 20% compared to the previous year. Factors contributing to this decline include the ongoing conflict in the Middle East, U.S. tariffs, and a slowdown in global automotive demand.In a conference call on July 23, Hyundai announced that it achieved sales of 49.2153 trillion won, an operating profit of 2.8509 trillion won, and a net profit of 2.8880 trillion won for the second quarter. While sales increased by 1.9% year-on-year, operating profit and net profit fell by 20.8% and 11.2%, respectively.
Despite strong sales of hybrid electric vehicles, the operating profit margin dropped by 1.7 percentage points to 5.8% due to rising raw material costs and production disruptions caused by fires at parts suppliers. A Hyundai representative stated, "The global automotive industry is facing unprecedented challenges, with demand down 3.8% year-on-year due to geopolitical issues and intensified competition. We will strive to improve our performance through cost-cutting efforts, stabilizing raw material prices in the second half, and actively launching new models."
Posco Labor Negotiations Fail, Union Plans to File for Mediation
Posco's labor negotiations for this year have ended in failure, with the company and its union unable to reach an agreement on wages and collective bargaining. The Korean Metal Workers' Union, representing Posco employees, plans to file for mediation with the Central Labor Relations Commission.According to reports, the sixth round of negotiations held on July 23 failed to find common ground on key issues such as wage increases, bonuses, and employee benefits. The union declared the negotiations unsuccessful, stating that the company did not present proposals that were acceptable to its members.
Following the breakdown of talks, the union intends to initiate strike procedures, having already approved a vote on potential strike actions.
Korea's Economy Shows Resilience, Rate Hike Likely from Bank of Korea
The South Korean economy continued to show unexpected growth in the second quarter of this year, increasing the likelihood of an interest rate hike by the Bank of Korea. On July 23, the Bank reported that the real GDP grew by 0.6% compared to the previous quarter, significantly exceeding its earlier forecast of 0.2%. After a contraction of -0.1% in the fourth quarter of last year, the economy rebounded with a growth rate of 1.8% in the first quarter, maintaining a solid trajectory into the second quarter.The quality of growth also improved, with real gross national income (GDI) rising by 3.6% from the previous quarter and 15.6% year-on-year. The gap between GDP growth and GDI growth reached 11.9 percentage points, the largest since records began in 1960.
This stronger-than-expected growth has increased the likelihood of further interest rate hikes by the Bank of Korea, as the improved growth rate and expanded GDI suggest potential for increased corporate investment and consumer purchasing power, reinforcing the case for continued tightening.
Joint Investigation Uncovers Evidence of Election Statistics Manipulation
The joint investigation team probing the shortage of ballots during the June 3 local elections has uncovered evidence suggesting manipulation of voting statistics by officials from the National Election Commission and the Gyeonggi Province Election Commission. On July 23, the investigation team conducted searches at the central and local election offices in Gyeonggi Province.The team, led by Kim Tae-hoon, Deputy Chief Prosecutor of the Seoul Central District Prosecutors' Office, stated that the searches aimed to gather additional evidence regarding the circumstances surrounding the ballot shortage on election day and to verify allegations of false reporting of voter turnout by election officials.
The search warrants reportedly included charges of forgery of public electronic records and obstruction of official duties.
Supreme Court Delays Ruling in Kim Geon-hee Stock Manipulation Case
The Supreme Court has postponed the ruling in the appeal case involving Kim Geon-hee, related to stock manipulation at Deutsche Motors. On July 23, the court announced that the case would be referred to the full bench for further deliberation.Originally scheduled for a ruling on July 24 by the Supreme Court's second division, the case was sent to the full bench just a day prior. If the four justices in the division cannot reach a consensus or determine that the case is unsuitable for their review, it will be escalated to the full bench for a decision.